India and China�s annual incomes are increasing at the rate of increase of 18%, which in turn is encouraging diamond prices to scale up, while the shares of diamond mining companies are heading for a rebound.

According to RBC Capital Markets, demand for diamonds may increase by 5% per year and could cross $20 billion by 2014. Henk Groenewald, a manager at Coronation Fund Managers, said demand for polished diamonds �will increasingly be driven by the faster-growing countries�.

Evy Hambro, the London-based managing director of BlackRock Inc.'s World Mining Fund, said �The supply and demand fundamentals are very supportive for prices. We see dwindling stocks and a shortage of new mine development.� An 8.4% increase in diamond prices is expected during the first half of 2007, which may help shares of Aber Diamond Corp., Shore Gold Inc. and Trans Hex Group Ltd. rebound after witnessing a 50% fall this year.